Oceana Gold's Macraes mining operation. Photo by Craig
Mining higher grades of gold-bearing ore has boosted
Oceana Gold's final quarter production.
It delivered 232,909oz for the 2012 calendar year, surpassing
its downgraded full year guide.
Crucial cash costs to produce each ounce were cut from
expectations of more than $US1000 an ounce to an average
unaudited $US940 for the year, with fourth quarter cash costs
down to $US638 an ounce.
Oceana shares traded at $3.50 following the quarterly result,
but plunged to $3.41 at the close.
Its newly commissioned northern Philippines gold and copper
mine, Didipio, initially returned gold recoveries at 80% and
copper at 85%, with concentrate sent for export.
However, the plant is ''temporarily off-line'' for the ''next
few weeks'' as modifications are made to ''deficiencies'' in
its tailings delivery system.
Oceana chief executive Mick Wilkes said both its Macraes
operations, in East Otago, and Reefton, on the West Coast,
delivered higher grades of gold-bearing ore to the mill, with
production up 55% on the quarter to September.
''The decrease in cash costs from the third quarter 2012 was
mainly attributable to higher ounces of gold sold,'' Mr
Earlier guidance for Oceana's full-year production were
downgraded from 230,000oz250,000oz to 225,000oz-230,000oz
during the year - with 232,909oz produced, and 230,119oz sold
during the year. Mr Wilkes reiterated guidance given last
month for production of 285,000oz-325,000oz this year, having
said in August that by 2016 Oceana wanted to produce
600,000oz of gold from the New Zealand and Philippines
For the fourth quarter, revenue was $US119 million from the
sale of 69,761oz at an average global spot price of
Craigs Investment Partners broker Peter McIntyre said the
fourth quarter result was ''strong'' for Oceana, from a
combination of mining higher grade ore, and taking more gold
''Oceana can probably maintain that cash cost [around
$US600], with Didipio yet to come on stream,'' he said.
Forsyth Barr broker Peter Young said ''the biggest positive
surprise'' was the cash costs, at $US638 oz, ahead of his
firm's $US887 forecast.
The cash costs were $US17 million below forecast and $10
million-$15 million below typical quarterly costs.
''We will need to speak to Oceana to understand why there has
been such a large drop in cash costs,'' Mr Young said.
Mr Wilkes said Didipio throughput rates had approached the
equivalent of 2.5 million tonnes a year, and once plant
modifications were completed, the project was expected to
increase to 3.5 million tonnes a year.
There are an estimated 44 million tonnes of ore to be mined
at Didipio over 16 years, with eventual annual gold
production targets of 300,000oz-350,000 oz Oceana's full-year
report is due to be released in mid-February.